[unreadable] There are approximately 150,000 infants, children, and adolescents in the United States with chronic hepatitis C virus (CHC) infection. While alpha-interferon (IFN) alone or in combination with rabavirin and pegylated interferon (PEG) in combination with RV have been approved by the FDA for use in subjects over 18 years of age, no therapies have been approved for use in pediatric subjects. Published reports of IFN monotherapy in children with CHC have suggested that response rates are higher than in adults. PEG + RV is the most effective therapy for adults with CHC. Given that RV is a teratogen, and that subjects < 18 years of age may have high response rates to PEG alone, the purpose of this proposal is to perform a randomized controlled trial to comparing the safety and efficacy of PEG + placebo vs. PEG + RV (1:1 randomization). 112 HCV RNA+ IFN-na[unreadable]ve children 2-16 years of age will be enrolled in this multi-center Phase II clinical trial. 11 pediatric centers will work in collaboration with Roche Laboratories Inc., which will supply the pegylated interferon (Pegasys(tm)), to be given at a dose of 180 mcg/1.73m2 sq week X 48 weeks, with a treatment-free follow-up of 24 weeks. RV will be given at 15 mg/kd/day p.o.b.i.d. (not > 1200 mg/day) in 200 mg tablets. All children randomized to the PEG+RV arm will undergo pharmacokinetic/pharmacodynamic testing. Children randomized to PEG+ placebo who fail to exhibit viral disappearance (HCV RNA less than 100 copies/ml by Amplicor(tm) polymerase chain reaction assay) at week 12 will be crossed over to PEG and RV (a compassionate monotherapy/combination" therapy arm). Children who were randomized to PEG and RV who fail to exhibit viral disappearance at week 12 will be maintained on PEG + RV. (a compassionate "combination/combination" therapy arm) given the lack of suitable therapeutic alternatives. The primary analysis will be on an intent to treat basis; the primary endpoint will be sustained viral response 24 weeks off therapy. Other endpoints include biochemical and clinical safety assessments. This trial would thus provide critically needed data to guide safe and effective treatment of CHC, a major cause of liver disease in children [unreadable] [unreadable]